Aug032009

“Today, we received a briefing from the National Highway Safety Traffic Administration (NHSTA) on the initial results of the ‘Cash for Clunkers’ or ‘CARS’ program. What we’ve learned is that American consumers are choosing vehicles with much higher fuel efficiency than is required. To date, it has proved to be both a stimulus and a fuel efficiency program.

Some 120,000 sales so far have been reviewed, and the fuel economy numbers continue to hold strong. The fleetwide average of new vehicles sold under the program is 22 percent higher than the average fuel economy of all new vehicles sold in 2008.

Almost 60 percent of new sales were passenger cars, 34.8 percent were SUVs and light trucks, and only 5.5 percent were the big trucks that posed a concern for us. The average voucher was $4,237, which means that the vast majority of sales are for more efficient vehicles that qualify for the higher voucher value of $4,500. We understand another 100,000-130,000 can be processed before the $1 billion is fully spent.

It’s clear that consumers are trading in their old, inefficient trucks for more fuel efficient vehicles. That’s really a credit to the American people who understand that the price of gas is on the rise and that improved mileage is important. So I believe that this program is good public policy if it can drive those decisions.

Senators Collins, Schumer and I do have some concerns about the source of the additional $2 billion of funding selected by the House without Senate consultation. We believe the Title 17 renewable energy loan guarantee program is very important. So, we would hope that we could work with our colleagues in the Senate and the House to find another source in the stimulus or to ensure that the funds are repaid.

Bottom line: The original intent of the ‘clunkers’ program was to encourage people to buy more fuel efficient vehicles, and the data so far tells us that's exactly what’s happening. So, I believe the right decision at this time is that the program should be extended.”